Building violations in a second-hand apartment: how to check before signing

What counts as a building violation

The Planning and Building Law, 5725-1965, provides that many types of building work require a permit (section 145). Some works are exempt from a permit, under the conditions set in the Planning and Building (Works and Structures Exempt from a Permit) Regulations, 5774-2014. Everything else, without a suitable permit, is a violation. The violations I encounter most often in pre-purchase checks:

1. Building without a permit: an extra room, an addition on the roof, a balcony that was enclosed and joined to the living room.
2. Deviation from a permit that was granted: an exterior wall that was moved, openings that were enlarged, a gallery or attic that became a room.
3. Use different from what is permitted: a parking space or storeroom converted into living space, or a shelter that became a room.
4. Splitting or merging apartments: one apartment divided into two, or two apartments that were merged.
5. Use of the common property: a roof, yard or stairwell annexed to the apartment without consent and without registration.

Why it is the buyer's problem, not only the seller's

1. Enforcement: the local committee can act against a violation even after the apartment has been sold, through demolition orders and fines. Using a structure built without a permit is considered a continuing offence, so even old construction is not necessarily immune.
2. Mortgage: the bank's appraiser usually values only what was built lawfully. A five-room apartment in which one room is not legal may be valued as a four-room apartment, and the mortgage will shrink accordingly. In addition, the appraiser will deduct from the apartment's value the cost of restoring it to its permitted state.
3. Registration: when the actual apartment does not match the condominium plan, difficulties may arise in registration and in a future sale.
4. Neighbors: an addition built at the expense of the common property may lead to a claim by the other apartment owners, including against the new owner.
5. Urban renewal: in TAMA 38 and evacuation-and-reconstruction projects, the consideration to the apartment owners is usually derived from the registered or permitted area, not from area added without a permit.

The check, step by step

1. Land Registry extract and the condominium plan. Check the registered area, the attachments (parking, storeroom, roof, yard), and the registered notes. See how to read a Land Registry extract.
2. The building file at the local committee. Retrieve the latest building permit and the plans approved with it, and check whether a completion certificate was issued. In many committees the file is available for viewing on the authority's website.
3. Comparison on site. Compare the approved plans to the apartment itself: area, exterior walls, balconies, openings, gallery, and what is happening in the parking space and the storeroom. I carry out this comparison myself, based on professional knowledge of engineering and appraisal.
4. Measurement when in doubt. When the gap in area is unclear, a licensed surveyor can measure the apartment and compare it to what is permitted.
5. Inquiry with the enforcement department. Check whether an enforcement file was opened, whether an order was issued, or whether proceedings are pending against the property.
6. The seller's representations. Ask the seller in writing what was built, when and by whom, and put the answers into the contract.

You found a violation: five options

Legalization is not always possible. When the plan applying to the site does not allow the addition, no permit will be granted for it, and the options are to buy as is or to demolish. The assessment of whether legalization is possible is carried out by an architect or engineer. When the permit involves a relief or a non-conforming use, a betterment levy may also be charged, and it is worth providing in the contract who bears it.

What to write in the contract

1. The seller's representation: what was built with a permit, what without a permit, and that the seller is not aware of any enforcement proceedings. The list of known violations is attached to the contract.
2. Indemnity: the seller bears any order, fine, demolition or expense arising from a violation that existed before delivery.
3. Trust: part of the price is held by a lawyer until the permit is obtained, or until an agreed period passes without enforcement.
4. Condition precedent and right of cancellation: if the permit is not obtained on time, or if a material violation that was not disclosed comes to light, the buyer may cancel and get the money back.

You discovered a violation only after buying

The Sale Law, 5728-1968, defines when the property delivered does not conform to what was agreed, and requires the buyer to notify the seller of the non-conformity immediately after discovering it (section 14). A seller who knew or should have known of the violation and did not disclose it cannot hide behind an "the apartment is sold as is" clause (section 16). If the seller misled the buyer, the Contracts (General Part) Law also allows the contract to be cancelled (section 15). See also a seller who concealed dampness. The response must be quick and in writing, because waiting may harm the right.

Timeline and cost

Timeline: a preliminary check of the Land Registry extract and the building file usually takes one to two business days. A site comparison and measurement, when needed, are coordinated separately.

Cost: the fee is set in a fee agreement. You can calculate the ancillary costs of the purchase with the purchase tax calculator.

Checking before, or discovering after: a comparison

Related articles and pages: Buying a second-hand apartment | Checks before buying | How to read a Land Registry extract | A seller who concealed dampness | Memorandum of understanding | Purchase tax calculator